Advanced Micro Devices (AMD +1.12%) had a stellar 2013 performance. While only one of the company's newest chip designs, dubbed Kaveri, has actually been released, two more, named Mullins and Seattle, have reached the final stages of development and are expected to become available in the coming months. These chips contain impressive advancements in processing technology and will help AMD make another great run this year. However, there are concerns about the company's decision to use BlueStacks as its primary dual-OS solution.
Future customers will probably be disappointed with BlueStacks-equipped tablets. It should be noted that the software is still in beta and is far from perfect. AMD has a lot at stake now and its recovery efforts should not be saddled with unnecessary risk. AMD is also weighed down by debt. The company's foray to dual-OS tablets is one venture where prudence must be exercised.
Based on its latest quarterly report, AMD's high debt ratio makes the company vulnerable to negative market reactions. A misstep in tablets this year can derail AMD's upward trend.
- Long-Term Debt-to-Assets: 47.35%
- Total Debt-to-Assets: 47.46%
- Long-Term Debt-to-Equity: 470.97%
- Total Debt-to-Equity: 472.12%
Relying on a freeware beta-version software emulation of Android OS is not an optimal method of creating a working dual OS concept. BlueStacks is a clumsy resource-hog, virtualization software that still needs a lot of work before it can offer a decent Android OS experience.
BlueStacks for Windows only received an average of three-stars ratings from CNET users. The Mac OS version fared even worse, an average of two-star judgments. Here are common complaints from people who used the beta versions of BlueStacks:
- Laggy performance, even on high-end computers
- Compatibility issues with several major Android apps and games
- Google Play is not installed by default, and installing it is complicated
- May contain Adware
- Unsecured Google Play accounts
- Weak security regarding credit card information
- Won't launch or crashes often
Each of the problems stated above will likely discourage prospective buyers. Post-sale disappointments from the buggy BlueStacks emulator may also bruise AMD's great reputation with respect to APUs and high-quality gaming experiences.
AMD'S 2014 tablet strategy
AMD's Project Discovery Windows 8 tablet concept received positive hands-on reviews during CES 2014. This Mullins-equipped tablet's gaming performance is comparable to a desktop PC. However, it is doubtful that Project Discovery can produce the same level of gaming experience with Android 3D games using BlueStacks.
BlueStacks can be a great emulator for Android OS when used on expensive, top-of-the-line computers. However, there are no AMD-equipped tablets right now that have 8GB of RAM for BlueStacks to run Android 3D games smoothly.
AMD cannot focus on the high-end market with mobile APUs like Mullins. The company, again, failed to win support for its latest mobile chips. In last week's CES 2014 event, only an Indian company, Xolo, demonstrated an AMD-powered Windows 8 tablet, the Xolo Win. The Xolo Win was powered by the older, less powerful, Temash APU, not Mullins or Beema.
Benchmark Chart Courtesy of Anandtech
AMD cannot match the marketing subsidies that Intel provides tablet OEM partners. Only MSI and Vizio have announced tablet products with AMD processors. Major players like Hewlett-Packard, Samsung, Acer, Asus, Lenovo, Dell, and Huawei have not shown any interest in Beema or Mullins.
Despite the performance advantage and cost-saving features of its mobile APUs, AMD will have a hard time keeping up with Intel's goal of selling 40 million-60 million tablet processors this year.
My recommendation
If AMD wants broader acceptance of its tablet processors, a non-software dual-OS solution is required. Intel and Asus designed a hardware-based scheme to employ the dual-OS concept in the Transformer Book Duet. Asus' Instant Switch technology lets users of the Duet change operating systems with the press of a button.
This implementation is better than virtual emulation because the Transformer Duet runs Android OS in a native, hardware-accelerated environment. Android apps or games can't run at peak performance levels in software emulations due to the lack of direct hardware acceleration.
AMD should drop BlueStacks and devise a hardware-based method. If MSI, Vizio, or Xolo cannot provide that requirement, AMD should consider negotiating an arrangement with Asus, as the company has already made a low-budget $249 Windows 8 notebook with AMD's A4-200 Temash SoC APU.
AMD is not as rich as Intel but the company won a windfall from Xbox One and PlayStation 4. It can offer Asus a marketing subsidy to sweeten the deal. The dual OS tablet concept is very important because budget-conscious consumers will likely be attracted to its dual functionality -- Windows 8 for productivity and Android OS for gaming/entertainment.
Winning in the tablet computing market is essential for AMD's future. Its PC-dependent core CPU and GPU business suffered another decline. According to Gartner, traditional PC sales declined another 10% last year. Gartner also predicted that the PC industry will further contract by 4% this year.
